Herb Miller was baffled when he learned that the Trump administration reported that his one-man business in Hixson, Tennessee, was approved for a coronavirus relief loan of as much as $5 million. The amount was $3,700, he said.
“Something is screwed up there,” said Miller, who has been an accountant for almost five decades. “I’m going to have to get this straightened out.”
A Bloomberg News analysis shows that the data for Paycheck Protection Program loans totaling more than $521 billion released on July 6 are riddled with anomalies.
Although the maximum PPP loan for a one-person enterprise is $20,833, more than 75,000 loans listing one job retained have higher amounts — including 154 showing $1 million or more.
The PPP was designed to keep employees of small businesses on payroll during the pandemic. Out of almost 4.9 million loans, the number of “jobs retained” is zero for 554,146 and blank for 324,122. Seven loans list negative job numbers.
Conversely, almost a thousand entries show 500 jobs for loans under $150,000, which is mathematically doubtful given that the aid is based on 2.5 times a firm’s average monthly payroll.
In 209 of those cases, it implies an average monthly salary of $4 or less per employee. Taken together, those figures call into question the job numbers in one out of every five PPP loans.
The anomalies cast doubts about the accuracy of the data for the centerpiece of the $2.2 trillion relief package enacted in March, including whether it supported the 51.1 million jobs that the administration has touted.
Backlash Over Borrowings
The PPP program is already facing backlash for doling out millions of dollars to big-name law firms, Wall Street managers and companies with ties to President Donald Trump and other politicians.
Now critics say the data issues make it difficult to evaluate how well the program worked, especially because the names of borrowers were redacted for smaller loans that account for about 87% of the number of loans.
“We are spending, as American taxpayers, upwards of half a trillion dollars to purportedly help small businesses stay afloat,” said Kyle Herrig, president of Accountable.US, a government-watchdog group that often criticizes the Trump administration. “We should know where the money went, how many jobs were saved, and right now with the data, we don’t have that ability to say with any certainty.”
The reported number of jobs is based on information provided by applicants, according to a spokesperson for the Treasury Department, which runs the PPP with the Small Business Administration.
While some borrowers may have erroneously omitted the jobs number, the total value of loans approved is consistent with supporting about 51 million jobs based on average small-business employee compensation, the spokesperson said.
Under the program, borrowers file their applications through an approved lender. After the SBA issues a loan-guarantee number for banks to disburse funds, the lender and borrower can agree to a lower the amount, the spokesperson said.
The SBA and Treasury didn’t explain how some million-dollar loans in the data are much higher than some borrowers said they applied for and received.